Gold prices fall below Rs 31,000 on selling, weak global cues

Gold prices dipped below Rs 31,000-mark after nearly one month, falling by Rs 350 to Rs 30,900 per ten grams in New Delhi on Monday.

Traders said heavy selling by stockists on the back of sluggish demand amid a weak global trend mainly pulled down the yellow metal's prices.

However, silver found some buying support from industrial units and ended higher by Rs 110 to Rs 49,010 per kg.

Gold in Singapore, which normally sets price trend on the domestic front, dropped by 0.4 per cent to $1,283.28 an ounce after data showed that US employers added more jobs than expected which reduced demand for the metal as an alternate investment.

On the domestic front, gold of 99.9 and 99.5 per cent purity plunged by Rs 350 each to Rs 30,900 and Rs 30,700 per ten grams, respectively. It had lost Rs 150 in the previous session. Sovereign also shed Rs 100 to Rs 25,000 per piece of eight gram.

On the other hand, silver ready recovered by Rs 110 to Rs 49,010 per kg and weekly-based delivery by Rs 160 to Rs 48,310 per kg. The white metal had lost Rs 200 in last trade.

Silver coins also spurted by Rs 1,000 to Rs 87,000 for buying and Rs 88,000 for selling of 100 pieces.

Govt will get over negativity, says Chidambaram

 
Finance Minister P Chidambaram has conceded that a potent mix of factors like slowdown of economic growth, dysfunction of the executive and corruption allegations has brought in a "high degree of negativity" but expressed confidence that the government would get over it.

"In the second five years of UPA, yes, there is, I can sense, I can see that the voter is at the moment negative. I can see that. I am blind if I don't see that. The reason is slowdown in economic growth , dysfunction of the executive, the cases of allegations of corruption, investigations that are going on, inflation and a slowdown in job creation. I think it is a potent and powerful mix, a potent mix of factors which has brought in a high degree of negativity. It is possible we may get over it."

"It is possible we don't get over it. It is a verdict we have to leave to the people. We have to accept whatever the verdict people will give," Chidambaram said at the "Thinkfest" event in Bambolim near Panaji.

Even in this slowdown in the last nine years, the country has clocked an average of 7.5 per cent growth.

"It is sad that at the end of the 10-year term, the growth has seen slowdown for a couple of years after having been high in the middle years and low in the last two years. I am doing my best. I will continue to do my best to see that there is an upturn before we go to polls," he said.

Chidambaram was replying to a question whether at the end of the second UPA term in the context of global pressures, CAG reports and high optimism in which the coalition was voted to power in 2009, there was today a lack of credibility for the government and that the prime minister was singularly lacking in leadership.

He shot back saying that he cannot remain in government and comment on the prime minister.

"That is not correct, that is not appropriate. I won't do it. He is the prime minister. I am a minister in his Cabinet. I have to accept his leadership and respect him. I am sorry, I cannot answer this question."

Indian rupee drops 83 paise against US dollar, breaches 63-mark

 
he Indian rupee dropped by 83 paise to 63.30 against the US dollar after a gap of nearly eight weeks on persistent dollar demand from importers and banks on the back of higher dollar overseas.

The domestic currency resumed lower at 63.00 per dollar as against the last weekend's level of of 62.47 per dollar at the Interbank Foreign Exchange (Forex) Market and dropped further to 63.32 per dollar before quoting at 63.30 per dollar at 10.40 am. It moved in a range of 62.94 per dollar and 63.32 per dollar during the morning deals.

Sustained dollar demand from importers and banks in view of firm dollar overseas mainly affected the rupee value against the dollar, a forex dealer said.

In New York, the American currency jumped last Friday after the US created twice as many jobs in October as Wall Street had expected, sparking yet another round of discussion about when the Federal Reserve could slow its bond buys.

Meanwhile, the BSE Sensex dropped further by 129 points, or 0.62 per cent, to 20,537.37 at 10.50 am.

Rupee will settle down, assures Chidambaram

 
Finance Minister P Chidambaram took to reassuring investors and traders after the rupee declined to a two-month low of 63 to a dollar, saying the currency will stabilise.

In early trade on Monday, the rupee fell to 63.33 a dollar, its weakest since September 18.

"Rupee will settle down," the finance minister told reporters in the national capital.

The Indian currency started weakening again last week after the dollar purchase by oil companies was partly shifted to the market.

The PSU oil companies are the biggest buyers of dollars, requiring $8-8.5 billion every month for the import of an average 7.5 million tonne of crude oil.

"Rupee weakness is due to OMC forex demand being moved to market... 30-40 per cent of OMC demand has moved to market," Economic Affairs Secretary Arvind Mayaram had said last week.

The rupee has recovered over 8 per cent since August 28, when it fell to a record low of 68.85 to the dollar.

The Reserve Bank of India had in August opened a special window to help the three state-owned oil marketing companies - Indian Oil, Hindustan Petroleum and Bharat Petroleum - to meet daily foreign exchange requirements and buy dollars directly from the central bank.

The gain in the rupee's value had also followed optimism that the US Federal Reserve would delay the tapering of its bond buying programme.

Bank licences: Sebi scans listed applicants, firms

As the Reserve Bank of India (RBI) gears up to issue new bank licences, capital markets regulator Sebi has also a job at hand that is of scrutinising all applicants coming under its jurisdiction directly or through group entities. Sebi's scrutiny follows detailed queries shot off by RBI to various regulators in India and abroad as part of its due-diligence of entities seeking to enter banking arena. According to a senior official, Sebi is looking into the capital market track-record of all the group entities of 26 banking aspirants, some of whom are either listed entities or have presence in Sebi-regulated businesses like mutual funds, brokerage and investment banks. The area of prime focus for the Securities and Exchange Board of India (Sebi) is action taken by or underway for violations to various market regulations, he added. The scrutiny is expected to be over this month itself. RBI is granting new bank licences for the first time in about a decade and preliminary screening process is underway for 26 entities that have submitted their applications. As part of this process, RBI has also asked the applicants to provide further details about their promoters, equity structure, financial inclusion programme, proposed banking model, among others, sources said. In addition to Sebi, RBI is also seeking details from other regulators such as insurance watchdog IRDA and pension regulator PFRDA, about the businesses of the applicant entities under their respective jurisdictions. With regard to some applicants, RBI has sought to know details about source of funds and compliance to the structural norms proposed for new banking players. Besides, RBI is seeking additional details from the concerned foreign regulators about those applicants whose group entities have operations, significant business dealings with foreign companies or overseas listings. Sources said this due diligence process involves information exchange with domestic and foreign regulatory authorities for all group entities of the applicants.